TD Ameritrade Holding Corporation provides securities brokerage services and related technology-based financial services to retail clients and independent registered investment advisors (RIAs).
The company provides its services to individual retail investors and traders, and RIAs primarily through the Internet, a national branch network and relationships with RIAs. It uses its platform to offer brokerage services to retail investors and traders under a commission structure and brokerage custodi...
TD Ameritrade Holding Corporation provides securities brokerage services and related technology-based financial services to retail clients and independent registered investment advisors (RIAs).
The company provides its services to individual retail investors and traders, and RIAs primarily through the Internet, a national branch network and relationships with RIAs. It uses its platform to offer brokerage services to retail investors and traders under a commission structure and brokerage custodial services to RIAs.
Products and Services
The company’s products and services include the following:
Common and Preferred Stock: Clients could purchase common and preferred stocks, American Depository Receipts and closed-end funds traded on any United States exchange or quotation system.
Exchange-Traded Funds (ETFs): The company’s ETF Market Center offers its clients approximately 2,300 ETFs from major providers, providing exposure to various asset classes and investment strategies.
Mutual Funds: Clients could compare and select from a portfolio of approximately 13,000 mutual funds from major fund families, including a range of no-transaction-fee funds. Clients could also exchange funds within the same mutual fund family.
Options: The company offers a range of option trades, including complex and multi-leg option strategies.
Futures: The company offers futures trades, as well as options on futures, in various commodities, stock indices and currencies.
Foreign Exchange: The company offers access to trading in approximately 75 different currency pairs.
Fixed Income: The company offers its clients access to various treasury, corporate, government agency and municipal bonds, as well as certificates of deposit.
Annuities: The company offers access to fixed and variable annuities provided by highly-rated insurance carriers.
Education: The company offers its clients a suite of free education for beginner, intermediate and advanced investors that is designed to teach investors how to approach the selection process for investment securities and manage their investment portfolios.
New and Secondary Issue Securities: The company offers primary and secondary offerings of fixed income securities, closed-end funds, common stock and preferred stock.
Margin Lending: The company extends credit to clients who maintain margin accounts. Portfolio margin, which bases margin requirements on the net exposure of all positions in an account rather than just on individual positions, is also available for certain qualifying accounts with net liquidating values of approximately $125,000.
Cash Management Services: Through third-party banking relationships, the company offers FDIC-insured deposit accounts and money market mutual funds to its clients as cash sweep alternatives. Through these relationships, it also offers free standard checking, free online bill pay and ATM services with unlimited ATM fee reimbursements at various machine nationwide.
U.S. Market access in Asia: The company offers clients in Singapore and Hong Kong access to the U.S. markets and the ability to trade stocks, ETFs, options, futures and options on futures.
The company provides its clients with an array of channels to access its products and services. These include the Internet, its network of retail branches, mobile trading applications, chatbot, interactive voice response and registered representatives through telephone.
Clearing Operations
The company’s subsidiary, TD Ameritrade Clearing, Inc. (TDAC), provides clearing and execution services for its securities brokerage business. Clearing services include the confirmation, receipt, settlement, delivery and record-keeping functions involved in processing securities transactions. TDAC maintains client accounts; extends credit in margin accounts to clients; engages in securities lending and borrowing; settles securities transactions with clearinghouses, such as The Depository Trust & Clearing Corporation (DTCC) and The Options Clearing Corporation (OCC); settles commissions and transaction fees; prepares client trade confirmations and statements; performs designated cashiering functions (including delivery and receipt of funds and securities to and from clients); possesses, controls and safeguards funds and securities in client accounts; processes cash sweep transactions to and from bank deposit accounts and money market mutual funds; transmits tax accounting information to clients and to the applicable tax authorities; and forwards prospectuses, proxy materials and other shareholder information to clients. The company contracts with external providers for futures clearing. It also contracts with an external provider to facilitate foreign exchange trading for its clients.
Strategy
The key elements of the company’s strategy are to focus on brokerage services; provide a comprehensive investor solution; continue to be a leader in the RIA industry; utilize its infrastructure to add incremental revenue; continue to be a low-cost provider of quality services; continue to differentiate its offerings through innovative technologies and service enhancements; utilize the TD Ameritrade brand; and continue to evaluate opportunities for growth through acquisitions.
Intellectual Property Rights
The company’s trademarks include both its primary brand, TD Ameritrade (including the ‘TD’ name through a trademark license agreement with TD), as well as brands for other products and services.
Regulation
The company’s futures commission merchant and forex dealer member subsidiary, TD Ameritrade Futures & Forex LLC (TDAFF), is registered with the Commodity Futures Trading Commission (CFTC) and is a member of, and the corresponding services functions are regulated by, the National Futures Association (NFA). Its broker-dealer subsidiaries are subject to the requirements of the Securities Exchange Act of 1934 relating to broker-dealers, including among other things, minimum net capital requirements under the SEC Uniform Net Capital Rule (Rule 15c3-1), ‘best execution’ requirements for client trades under SEC guidelines and the Financial Industry Regulatory Authority (FINRA) rules and segregation of client funds under the SEC Customer Protection Rule (Rule 15c3-3), administered by the SEC and FINRA. TDAFF is subject to regulations under the Commodity Exchange Act, administered by the CFTC and NFA, including CFTC Regulations 1.17 and 5.7, which require the maintenance of minimum adjusted net capital, and CFTC Regulation 1.20, which requires segregation of client funds. Certain of the company’s subsidiaries are also registered as investment advisors under the Investment Advisers Act of 1940. It is also subject to regulation in all 50 states, the District of Columbia and Puerto Rico, including registration requirements. TD Ameritrade Trust Company is chartered in the state of Maine as a state-regulated non-depository trust company.
In their capacity as securities clearing firms, TDAC and STI are members of DTCC and OCC, each of which is registered as a clearing agency with the U.S. Securities and Exchange Commission. As members of these clearing agencies, TDAC and STI are required to comply with the rules of such clearing agencies, including rules relating to possession or control of client funds and securities, margin lending and execution and settlement of transactions.
Competition
The company encounters direct competition from various other brokerage firms, majority of which provide online brokerage services. These competitors include E*TRADE Financial Corporation, The Charles Schwab Corporation and Fidelity Investments. It also encounters competition from the broker-dealer affiliates of full-commission brokerage firms, such as Merrill Lynch and Morgan Stanley, as well as from banks, mutual fund sponsors, online wealth management services (including ‘robo-advisors’) and other financial institutions and organizations, some of which provide online brokerage services.
History
TD Ameritrade Holding Corporation was founded in 1971.
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